Saturday, September 29, 2012

In an important and extensively reasoned opinion handed down yesterday, a Missouri federal district court rejected a series of challenges to the contraceptive coverage mandate of the Affordable Care Act brought by a small business organized as a limited liability company and by its sole owner who is Catholic. Plaintiffs claimed that the mandate burdens their exercise of religion. In O’Brien v. U.S. Department of Health and Human Services, (ED MO, Sept. 28, 2012), Judge Carol E. Jackson (a President George H. W. Bush appointee) first held that she need not decide whether O’Brien Industrial Holdings (“OIH”), a secular limited liability company, is capable of exercising religion within the meaning of the Religious Freedom Restoration Act or the First Amendment because, even if it is, the contraception coverage mandate does not infringe religious exercise rights.

Focusing on RFRA, the court held:

the challenged regulations do not demand that plaintiffs alter their behavior in a manner that will directly and inevitably prevent plaintiffs from acting in accordance with their religious beliefs…. [P]laintiffs remain free to exercise their religion, by not using contraceptives and by discouraging employees from using contraceptives. The burden of which plaintiffs complain is that funds, which plaintiffs will contribute to a group health plan, might, after a series of independent decisions by health care providers and patients covered by OIH’s plan, subsidize someone else’s participation in an activity that is condemned by plaintiffs’ religion. This Court rejects the proposition that requiring indirect financial support of a practice, from which plaintiff himself abstains according to his religious principles, constitutes a substantial burden on plaintiff’s religious exercise….

… [T]he health care plan will offend plaintiffs’ religious beliefs only if an OIH employee (or covered family member) makes an independent decision to use the plan to cover counseling related to or the purchase of contraceptives. Already, OIH and Frank O’Brien pay salaries to their employees---money the employees may use to purchase contraceptives or to contribute to a religious organization. By comparison, the contribution to a health care plan has no more than a de minimus impact on the plaintiff’s religious beliefs than paying salaries and other benefits to employees.

Moving to the 1st Amendment Free Exercise claim, the court held that the preventive services regulations under the ACA are a neutral law of general applicability, and thus consistent with the 1st Amendment. It also rejected plaintiffs’ arguments that the religious employer exemption in the regulations violates the Establishment Clause by favoring organized religion over less formal manifestations of faith or by excessively entangling the government with religion in determining whether an organization qualifies for the exemption.

There is an important distinction between the instant case and the Supreme Court’s compelled speech subsidy cases: plaintiffs in this case are not subsidizing speech. The plaintiffs’ contribution to their employees’ receipt of health care benefits (as required by the regulations) is conduct, not speech. It is true that the receipt of health care benefits often includes a conversation between a doctor and a patient, and the preventive services coverage regulations encompass “patient education and counseling for all women with reproductive capacity.” … However, this speech is merely incidental to the conduct of receiving health care.

Finally the court rejected plaintiffs Administrative Procedure Act arguments. It found that plaintiffs lack standing to assert one of their APA claims. They do have standing to assert that under the APA the regulation is arbitrary and capricious. However the court rejected plaintiffs’ claim that the government in adopting the mandate arbitrarily and capriciously ignored the impact of the regulation on secular, for-profit employers with religious values.